Exercise 23-8 Sell or process further LO A1

Cobe Company has already manufactured 22,000 units of Product A at a cost of $20 per unit. The 22,000 units can be sold at this stage for $420,000. Alternatively, the units can be further processed at a $250,000 total additional cost and be converted into 5,800 units of Product B and 11,900 units of Product C. Per unit selling price for Product B is $105 and for Product C is $54. 1. Prepare an analysis that shows whether the 22,000 units of Product A should be processed further or not.

	Sell as is	Process Further
Sales
Relevant costs:
Total relevant costs
Income (loss)
Incremental net income (or loss) if processed further
The company should